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Wednesday, March 2

2nd Mar - Quiet

Previously on MoreLiver’s:

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Hugo Dixon: EU has flaws, but calling it anti-democratic is falsifying realityThe Guardian
To suggest that Brussels engineered the downfall of governments in Italy and Greece is a distortion [but see also this]

Former BoE chief: Euro depression is 'deliberate' EU choice The Telegraph

Eurozone and Schengen -- Two Parallel Realities, Crossing in Greeceeuinside

Presentation:Weaker euro growth due to external factorsDanske Bank

The implications of Brexit for the rest of the EUvox
Britain will hold a referendum on whether to stay or leave the EU. Current polls point a very close vote. This column argues that Brexit could have serious economic and political consequences for the rest of the EU. The economic and financial frictions could be limited if both parties try to strike an amicable separation agreement. But political considerations, including the desire of the rest of the EU to prevent Brexit emulation, might result in a far more damaging outcome, not just for the UK.

Nothing comes for free inside or outside the EUOpen Europe
If Britain leaves the EU, it is likely that it would need a unique successor arrangement. But there is no escaping the inevitable trade-offs involved in international negotiations.

Busting 3 Brexit mythsPolitico
Myths: Brexit cannot happen * Negotiations for a future outside the EU would be relatively painless * The referendum will settle the question of Europe once and for all

Regulatory treatment of sovereign debt: Risk weights vs large exposure limitsvox
Sovereign risk and its treatment by European banks is a frequently debated topic. In particular, regulators are focusing on zero risk weighting and large exposure limits. This column argues that redesigning the macroprudential framework for sovereign risk management will be a key theme in the years to come. Depending on the exact outcome, the structure of the EZ bond market might look very different from its current shape. This could have far-reaching consequences for both the ECB’s monetary policy strategy and investors alike.

Draghi: ECB to Review Stimulus Amid Heightened RisksWSJ

Dudley the DoveTim Duy
The Fed will take a pass on the March meeting. Whether the statement is dovish, neutral, hawkish is the key question. Dudley opens up the possibility of a not just a neutral statement, but a dovish one. My sense is that this is shaping up to be a very contentious meeting as participants struggle with the question of exactly which data are they dependent upon.

TIPS are pricing the lowest inflation everMacro Man

Fed Increasingly Cornered As ADP Reports Surprising Beat In JobsZH

Martin Enlund: FX: a bazooka or an ICBM?Nordea
A plethora of events have triggered improvements in risk appetite and this at a time when macro hedge funds are short risky assets. A hawkish Fed could stop the improvement dead in its track, but not yet. EUR/USD is so far behaving as we hoped, but we are becoming increasingly nervous about how much is becoming baked in from the ECB - a bazooka or an ICBM?

Do the Size, Value, and Momentum Factors Exist in Emerging Markets?Quantpedia
This paper investigates the size, value and momentum effects in 18 emerging stock markets during the period 1990−2013.We find that size and momentum strategies generally fail to generate superior returns in emerging markets. The value effect exists in all markets except Brazil, and it is robust to different periods and market conditions. Value premiums tend to move positively together across different markets, and such inter-market co-movements increase overtime and during the global financial crisis.

Are Central Banks Exaggerating Deflation Risks?Marc Chandler

Danske DailyDanske Bank

Euro rates updateNordea

Positive US ISM, Optimism dominates, Asian markets up * The worst is over in US manufacturing * Core rates edging higher, periphery lower * Safe haven currencies weaker on Chinese stimulus

Morning MarketsTF
Stocks kicked off March with a bang in the US and Europe on Tuesday giving a boost to sentiment on Asian bourses on Wednesday. Talk of a possible fiscal stimulus move gave Japanese share investor sentiment a boost as well.

Daily FX Comment Marc Chandler
Markets Take Another Step Away from the Edge

Daily ShotTF
A flood of weak manufacturing data serves to underline the parlous fragility of the global economy. That said it's not all gloom a handful of smaller economies including Poland and Switzerland are chugging along nicely and there's a scattering of good news too from some pockets of the Emerging Markets bloc

Matt Levine’s Money StuffView / BB
Lucrative Bonds and Animated Toes

Daily Press SummaryOpen Europe
Government report: All existing alternatives to EU membership come with serious risks *
Austria calls for migrants to be “sent directly” to Germany as Greece becomes new migrant bottleneck * BlackRock: Brexit “offers a lot of risk with little obvious reward” * NATO General warns ISIS “spreading like cancer” amongst migrants, blames Putin for “weaponising” refugees * Heywood: Ministers backing Brexit will be allowed access to EU documents * Tory party members back Boris Johnson as next party leader * ECJ puts curbs on Germany’s refugee policy * Commission to think again on the application of bankers’ bonus cap * Spanish Socialist leader bound to lose first confidence vote as PP and Podemos officially declare their ‘No’ * Head of EU Single Resolution Board: It makes “perfect sense” to cap Eurozone banks’ holdings of sovereign debt * European Commission proposals could see sharp rise in price of e-cigarettes

Brussels PlaybookPolitico
Super Trump-day — ‘Back to Schengen’ — Brexit divorce scenario

Furious Rally Fizzles Overnight As Futures Follow Oil Lower


FX UpdateTF
The USDJPY poked its head up to two-week highs in the wake of a better-than-expected US ISM manufacturing survey yesterday as risk appetite stormed back higher. AUD is riding atop the crest of this new risk-on wave after a strong Q4 GDP print.

From the FloorTF
Reassuring economic data from the US and Australia saw investors cast risk-aversion overboard sparking a "massive" rally in Asian stock markets and boosting the Aussie dollar.

Kansa haluaa muutosta – uskottavat vaihtoehdot kuitenkin vähissä * USA:n tehdasteollisuuden luottamus odotettua parempaa * Kanadan talouskasvu hidastui odotuksia vähemmän * Etelä-Afrikan talouskasvu pysyy hitaana

Helikopteriraha ei ole QE kansalleRoger Wessman